‘Lakeland shows way for other co-ops’ – IFA

Milk processors are being called on to follow the example of Lakeland and increase their prices by the Irish Farmers’ Association (IFA).

Tom Phelan, the association’s national dairy chairperson, said that increases will be needed by all co-ops “for sustainable 2020 milk prices”.

“Lakeland Dairies, by increasing their December price by 1c/L, have shown the way for other co-ops to follow,” Phelan added.

The Ornua PPI [Purchase Price Index] for last month increased to a milk price equivalent of 32.3c/ including VAT, nearly 2c/L more than the average price paid by co-ops for November. Generalised milk price increases are well and truly overdue.

Phelan also called on co-op boards to “plan for further increases before the new season commences”.

Yesterday, Lakeland announced a base price increase for the Republic of Ireland for December milk of 1c/L, bringing the processor’s base price offering to 31.31c/L including VAT and a lactose bonus. Qualifying farmers will also receive the usual out-of-season payment.

In Northern Ireland, a base price of 25p/L will be paid for December supplies plus the usual out-of-season payment. The base price has been increased by 0.5p/L.

Phelan highlighted that milk market indicators from Europe and further afield have “improved quite significantly over the last five to six months”.

“Still, our co-ops have not increased milk prices as much as they clearly can, and we urge them to correct the situation ahead of spring. The high solids which underpinned milk cheques in the autumn will have crashed when milking resumes next month, and farmers will find themselves under serious cash flow pressure,” he added.

Phelan concluded: “A milk price increase of 1c/L on December milk supplies is the minimum co-ops must pass back to farmers, but they must also start planning to deliver sustainable milk prices for 2020, and this will require further increases before the season recommences.”